Trident Gaming Group Considering London IPO
Published: Monday, October 10, 2005 Online-Casinos.com
TRIDENT GAMING GROUP CONSIDERING LONDON IPO
Isle of Man licensed betting company planning on spring listing
Following its much-publicised aquisition of Gamebookers recently, Isle of Man-based
Trident Gaming is now reported to be seeking expert advise on a London
public listing - possible as early as next (UK) Spring.
The company hit the UK business press headlines earlier this year when it acquired
Gamebookers, one of the top 30 internet gambling firms in the world, serving
clients from 123 countries.
"We started out in 2001, building sports betting solutions," says chief
executive John O'Malia. "Since then, we have been growing more or
less organically and establishing our product, BetBug, which due to its
unique design and regulatory profile is the only way to offer sports betting legally
in the US market."
Trident's workforce has remained at 12 for nearly four years, but the acquisition
of Gamebookers, which employs 65 people, has led to rapid growth. "Gamebookers
will have turnover of about Euro 180 million this year and earn about Euro 11
million in revenue and Euro 5.5 million to Euro 6 million in profit," claims
O'Malia, who began his career as a City trader.
Trident financed the move using a GBP 20 million convertible loan from a hedge
fund. "It was very important for us to fund the deal in a way that allowed
us to control all the variables and make sure it got done," he says. "
Subsequent deals in the market have shown that similar assets are valued much
higher than our acquisition price, which lends support to our reasoning on why
the purchase was attractive.
"Now we are in a position where we would like to take the convertible debt
and roll it into equity. After all, the cost of capital with equity funding in
the current market is lower than the cost of the debt financing that we put in
place."
He cites a further reason for looking at an IPO as an option: "A key challenge
for Trident is keeping up with the consolidation in the market and remaining a
player as companies jump from being worth $ 50 million to $ 100 million to $ 250
million via acquisitions of their own. We have to make sure we are structured
in a way that we can take advantage of this and be part of that trend. In this
climate, that in effect necessitates a public equity structure."
O'Malia says he has two main problems. "First of all, how do I manage the
risk in the IPO process in order to roll with the punches of the market? Right
now, gaming stocks are all the rage, but it will not necessarily always be so.
How, then, do we manage that uncertainty?"
His second question is closely related. "Given that the industry is experiencing
very rapid consolidation, how quickly should one feel compelled to make follow-on
transitions and acquisitions?" he asks.
"Obviously, in this market, there are several potential targets. But should
we run our business steadily and follow an - albeit rapid - organic growth path,
or should we go out and leverage our listing very quickly into additional transactions?"
